What are zero hours contracts?
Zero hours contracts, as the name suggests, are employment contracts that do not guarantee any work to the individual. The employer is not obliged to provide a minimum number of working hours and the worker is not obliged to accept any work offered.
Very often, individuals with zero hours contracts, because of the casual and ad hoc nature of the work they do for an employer, are not classed as employees. As a result, they do not qualify for many employment rights, such as protection against unfair dismissal.
Why do employers offer zero hours contracts and why do workers accept them?
Zero hours contracts are nothing new; they have been used in many industries, particularly the hospitality sector, for a long time.
They provide flexibility for employers where there is a temporary or changeable need for staff, such as seasonal peaks in demand, short notice changes in staff requirements and on call/bank work.
Workers benefit from flexibility too, with no consequences to refusing work that is offered and with employment experience provided to those looking for more permanent work or, for instance, students looking to fit work round their studies.
Why have they become so unpopular?
In 2013, a survey suggested that as many as one million people could be working on zero hours contracts. This prompted concerns that staff were being exploited, amid reports that some employers use these contracts to avoid giving workers employment rights. In some cases, workers were also required to sign an ‘exclusivity’ clause, preventing them from working elsewhere, despite not being guaranteed work. As of February 2015, 700,000 were thought to be working on zero hours contracts in their main job, an increase from the previous year.
What is likely to happen to zero hours contracts in future?
Prior to the general election, the government took steps to ban the use of exclusivity clauses in zero hours contracts and proposed measures to tackle avoidance of the ban. The ban will also catch contracts which do not provide a minimum income level, with the threshold still to be announced.
The Labour party wants to see new rights for workers on these contracts, including a right to receive a fixed hours contract automatically, if they have consistently worked regular hours, and to receive compensation from their employer if shifts are cancelled at short notice. There is little doubt that zero hours contracts will remain under scrutiny in the coming months.
What should I do if I employ workers on zero hours contracts?
Employers may still use zero hours contracts but should check that contracts do not prevent workers from working elsewhere, ahead of the forthcoming ban on exclusivity clauses.